Performance Audit Triggers Review of Construction Practices

The Port of Seattle will review its contracting processes and focus in particular on documentation and record-keeping as a result of the recommendations contained in a performance audit made public today by the Port Commission. It also will put more focus on developing its small and disadvantaged business programs.

Those were among the recommendations of a performance audit performed for the Port by Talbot, Korvola & Warwick, or TKW, a Portland-based accounting firm specializing in performance audits.

The performance audit was directed by the commission and primarily aimed at an investigation of how the Port's capital program and capital costs compare to other agencies of similar size.

"We wanted to know if our costs are in line and to examine at our construction processes," said Lloyd Hara, vice president of the commission and a member of the commission's audit committee.

"It is important for the public to recognize that this examination was self-directed. I would like to see us annually conduct at least one performance audit," Hara said.

Hara noted the performance audit provided the Port staff some significant recommendations for improvement and that both the commission and the staff are eager to act on them. The audit reported that the Port's "soft costs" associated with capital projects were consistent with the industry average.

Although Port staff successfully brought online a number of major capital projects in recent years, the auditor noted that the Port does not track and manage construction costs in a way that allows meaningful comparison with other agencies.

The audit also called for an examination of organizational structures and more consistency in project record-keeping.

"This is a good heads-up for us," said Port of Seattle CEO Tay Yoshitani. "We already do some of the things the auditor recommends, we just need to do them better. We need to focus on managing our processes and audit ourselves on how well we adhere to those processes."

A second area of emphasis for the audit was to look at the Port's effort to allow small and disadvantaged businesses to take advantage of economic opportunities. The audit report called in particular for a more centralized and focused staff organization, additional outreach to the small-business community, and for communication and training both for port staff and others.

"It is helpful to have this information so that we can improve our outreach and effectiveness in the greater community where there are so many small and disadvantaged businesses that are looking for ways to work with the Port," Hara said, "and I believe we need to do better in this area as well."